Analyst Marcus Sotirio A UK-based digital asset broker GlobalBlock
Bitcoin fell further this morning, $ 19,000, Because it is trading below the 200 week SMA. So far, Bitcoin has not retested this level as a resistance, but if it is retested and rejected, this will be a very bearish signal. This is the first time this level has been breached in the long run and may indicate that the bear market is imminent.
There is a “risk-off” tone in the European market this morning, putting selling pressure on US stock market futures and crypto markets. Spain’s June year-on-year headline inflation was 10.2%, well above expectations of 9% and May’s 8.7%. This is in contrast to Germany’s year-over-year CPI data, which fell from 8.7% to 8.2%, below the expected 8.8%. The ECB (European Central Bank) is forced to raise interest rates, even though Germany’s readings are lower than expected. This means that slow growth is likely to cause a recession in Germany. Inflation in Spain, Belgium and France has skyrocketed to its highest level since the 1980s, and ECB Governor Christine Lagarde admitted yesterday that “low inflation is unlikely to recover.” This has brought more fear around the European economy in the near future.
In the United States, as the University of Michigan Consumer Psychology Index shows, consumer sentiment is lower than it was during the 2008 GFC (Global Financial Crisis). This further shows that US growth will slow in the coming months, in line with rising inflation. This is related to cryptography. This is because the crypto is heavily influenced by high inflation data (the graph below shows BTC and ETH plotted with the inflation print).
Stock prices are determined by two main aspects: future returns and multiples of what you are willing to pay for those future returns. Expectations of rising interest rates have reduced multiples, leading to a downtrend in stocks. Most mutual fund analysts may not be fully aware of recession prices, many of which are not experiencing the macro environment we are currently experiencing. Therefore, the next month, lower earnings adjustments may be repeated. If this is the case, stocks may be forced down and cryptocurrencies may be brought in.
